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Thursday, 16 July 2020

Discom losses due to different accounting procedures: Probe

Geetanjali Gayatri

Tribune News Service

Chandigarh, July 15

A four-member committee constituted by the Haryana Government to look into the unusually large losses incurred by the two power distribution companies nearly a decade ago has found out that nothing was amiss and the accounting was done in keeping with the present policy.

The committee was tasked to look into the increase in losses from Rs 6,505 crore in 2010-11 to Rs 19,708 crore in 2011-12 in the Uttar Haryana Bilji Vitran Nigam (UHBVN) and the Dakshin Haryana Bijli Vitran Nigam (DHBVN). The Congress government headed by Bhupinder Singh Hooda was in power then.

According to the committee's report, the financial statements for 2011-12 were prepared by showing regulatory assets, Fuel Surcharge Adjustment (FSA) and subsidy as income even though the discoms did not receive any cash.

Panel set up by government

A committee formed by the state government was tasked to look into the increase in losses from Rs6,505 crore in 2010-11 to Rs19,708 crore in 2011-12 in the Uttar Haryana Bilji Vitran Nigam and the Dakshin Haryana Bijli Vitran Nigam. The Congress government headed by Bhupinder Singh Hooda was in power then.

Though nothing was amiss as per the existing accounting practice, it did lead to decrease in losses reported, while borrowings met the cash deficit. This led to increased liabilities for power purchase. Though this practice of showing the regulatory assets, FSA and subsidy had invited certain observations from the Comptroller and Auditor General (CAG) of India, these were not revised in the past.

The report explains that when the Centre had offered the Financial Restructuring Plan (FRP) of discoms in October 2012, the losses did not match the borrowings. In fact, the losses were way less than the borrowings.

To enable the discoms to avail themselves of the benefit of the scheme and ensure their viability, a second audit was carried out to clean up the books after following the prescribed procedure, the report is learnt to have mentioned. This led to increased losses. The accounting policies followed in the second audit continue to be followed even today.

Chief Minister Manohar Lal Khattar had announced constitution of a committee in the Vidhan Sabha during the Budget session after the Opposition had raised questions about the growing debt burden.

The treasury benches had countered the argument by saying that the losses dated back to the time when the Congress was in power. During trading of charges, Khattar had announced an inquiry.

The committee, comprising the Additional Chief Secretary (ACS) (Power), ACS (Finance), or his representative, CMD, UHBVN, and a charted accountant, was constituted in May this year and the report was expected by July-end. Sources say the report was submitted earlier this month.

Sources say since the Hooda government was in power when the losses saw a sudden jump, the inquiry was essentially a political move aimed at hitting back at him since he had been raising the matter of increasing debt burden.



from The Tribune https://ift.tt/3jayBsQ

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